The MSCI Asia Pacific Index advanced 2.3 percent to 123.55 this week, the most since the period ended on Sept. 14. Through Friday, the gauge had climbed 13 percent from this year’s low on June 4, as stimulus measures in Europe, the US, Japan and China boosted market sentiment amid a global economic slowdown and Europe’s crisis.

“We see good signs of stabilization and we can probably say the US economy is not going backwards,” said Tim Leung, a portfolio manager who helps manage about US$1.5 billion at IG Investment Ltd in Hong Kong. “The market is enjoying a moment of relatively less hostile news from Europe.”

Taiwan’s TAIEX fell 0.4 percent this week to 7,408.76, down from 7,437.04 on Oct. 12.

Japan’s Nikkei 225 Stock Average rallied 5.5 percent, the biggest weekly advance since December, as the yen weakened against the US dollar, which could help boost earnings of Japanese exporters.

The Asian benchmark traded at 13.1 times estimated earnings on average, compared with 13.7 for the Standard & Poor’s 500 Index and 12.2 for the STOXX Europe 600 Index.

Exporters advanced as reports showed industrial production and retail sales gained more than expected in the US last month, adding to signs of a recovery of the world’s biggest economy is taking hold.

China’s economic growth has started to stabilize, Chinese Premier Wen Jiabao (溫家寶) said in remarks published on Wednesday by Xinhua News agency. The government is confident of achieving annual targets and the economy will continue to show “positive changes,” Wen said, according to Xinhua.

Emerging-market stocks fell, paring the biggest weekly rally in more than a month, as disappointing earnings at Microsoft Corp dragged down computer companies and foreign investment in China fell more than economists forecast.

The MSCI Emerging Markets Index lost 0.7 percent to 1,006.07 at the close of trading in New York, its first retreat in four days. Quanta Computer Inc (廣達電腦), the world’s largest laptop maker, declined for a third day in Taipei and Samsung Electronics Co fell for the first time in five days in Seoul.